By Rawle Lucas
Daily Staple
Even with a century of exporting rice under its belt, Guyana appears apprehensive about the long-term future of its rice industry and the export prospects that could face rice producers. Rice is no ordinary grain in Guyana. It is an integral part of Guyana’s colonial history and, over the years, has become the daily staple of most households.
Apart from its historical and cultural importance, rice in Guyana is of major economic significance, even though it may have lost its high-ranking place in the economic hierarchy of Guyana in recent years.
Built up on a hybrid of private and public investment and control, rice impacts the lives of thousands of Guyanese. Some estimates put the number at 100,000 or nearly 14 percent of the population who depend on rice to fashion a life for themselves and a future for their families. Contained in that number is the private interest in rice, represented by an estimated 10,000 to 12,000 farming families in the country, most with plot sizes ranging from 10 to 20 acres.
These farming families drive rice production across five of Guyana’s 10 administrative regions, and depend on it for their livelihood. They prepare the land, sow the paddy and harvest the crop. Add the rice millers whose manufacturing operations convert the paddy into rice grains for exportation, the input suppliers and the financiers and it is easy to see how pervasive and meaningful the activities of the rice industry are to Guyanese.
Public Interest
The Guyana Rice Development Board (GRDB), along with the Ministry of Agriculture, represents the public interest in the rice industry. Backed by legislative authority, significant responsibility falls to the GRDB to assist the rice producers in making their contribution to the welfare of the industry. The GRDB undertakes a number of tasks that are too expensive or complex for the many small-scale rice farmers to perform. Some of these tasks include performing research to find better varieties of seed that could increase rice output, methods of controlling pests and other hazards to reduce loss of output. The efficient transfer of this technology to the rice farmers in Guyana is an initiative critical to the success of the industry. The GRDB also helps to secure access to the markets of foreign countries for rice produced by Guyana, and to maintain standards for the rice consumed at home and abroad.
Emerging Tiredness
The combined private and public sector effort at rice production helped to position Guyana as a major net exporter of rice to the European Union, Caricom and other countries. Yet, the confidence that should come from the long experience and an enduring history with a product of such vital import to the country and the world appears to be waning. Evidence of an emerging tiredness with rice is embedded in the comparative analysis of the economic returns of rice to that of aquaculture offered by the President of Guyana, in a recent appearance in New York, in an apparent effort to drum up support for economic diversification in Guyana.
Doubt and Hesitancy
A number of factors may be conspiring to create doubt and hesitancy in the psyche of the controllers of the rice industry. The sources of the stress come from both inside and outside Guyana and manifest themselves in a variety of ways.
Despite significant investment in the industry with help from the IDB, the European Union and other sources, rice has lost its sheen in the Guyana economy and is not living up to its full potential. In 1998 for example, rice accounted for 10 percent of income in Guyana. By 2007, rice was contributing 5 percent to the income of Guyanese. It had been surpassed in importance in this regard by the distribution, construction, and communication and transportation industries.
Further evidence of the weakening of rice was its declining contribution to foreign exchange. For a long time now, rice has been overtaken by gold as a major earner of foreign exchange. In recent times too, shrimp and timber have been nipping at the heels of rice in the race to prominence in the foreign currency pecking order. An added worry about the rice industry is the constant tension between farmers and rice millers over timely payments, and in some cases, non-payment for rice by the latter. This friction puts rice production at risk.
Yield Increase
These failings are occurring despite some positive developments in the rice industry and more favorable global prices for the commodity. For example, the amount of acreage used for rice cultivation has fallen by 11 percent during the period 2003 to 2007 compared to 1998 to 2002. The good thing about this is that average rice yield increased by about 9 percent during 2003 to 2007 over the earlier period of 1998 to 2002. As a result, Guyana is producing a larger amount of rice from less land. However, unless yields increase significantly, Guyana would have to bring more land under rice cultivation if it wanted to improve substantially its place in the global rice trade.
The bulk of the revenue of the rice industry comes from the export of rice. Traditionally, Guyana exported about 75 percent of the rice that it produced and within the last decade it has been struggling to maintain its historical export performance, despite doubling its rice output within that time frame. Rice exports averaged 69 percent between 1998 and 2002 and was spiraling lower to 66 percent from 2003 to 2007 when the unexpected global events of last year provided sufficient incentive and opportunity for Guyana to send 90 percent of its crop abroad in 2007 alone.
Major Trauma
As seen from past experience, the global market in rice is no friend of Guyana upon which it could unreservedly hang its hopes. Less than one year after planning to capitalize on astronomical global rice prices, Guyana has seen the price of rice decline by nearly 50 percent. It faces the prospect of further price decline as demand for rice wilts along with the contracting income and hard-to-get credit in major rice importing countries. Guyana will have to get used to the price uncertainty since its protected quota-friendly relationship with its biggest buyer, the European Union, was likely to end soon.
The life of rice is not altogether rosy with its Caricom partners either. Guyana encountered some commotion in the export of rice to Jamaica as the global trade in rice underwent major trauma. Often thought of by Guyana as a valuable buyer of its rice, Jamaica expressed doubts about Guyana’s ability to meet its demand for the commodity. No doubt frightened by Guyana’s recent export performance, Jamaica raised the possibility of acquiring rice from alternative sources, much to the consternation and chagrin of Guyanese exporters and members of the administration.
Coming later on, as if in well-orchestrated sequence, was the announcement by another valuable Caricom importer, Trinidad and Tobago, of new rules regarding the importation of rice from Guyana into the twin-island republic. The developments in the region forced rice producers to turn to the administration for assurance that they would be able to sell the rice that they produce.
Strategic Position
The turbulence over rice in the region emerges at a moment when the Caribbean Single Market and Economy is supposed to be taking shape and serving to deepen economic interaction among its members. The single market, on its face, is supposed to be good for Guyana yet it may be giving rice producers heartburn.
To its credit, Guyana has decided to revisit the fate of the rice industry and to adopt a strategic position on pricing and market diversification. In addition, a group has been formed recently to examine the prospects of the rice industry and plan for its future. Such action becomes necessary and urgent often when all is not well and the most high profile cheerleader, the President, starts talking about better ways to use the scarce resources of Guyana.
